Solar Buying Spree!: SunPower Grabs SunRay, Calisolar Takes 6N Silicon


Blue light special on solar startups. This morning there’s news of two more acquisitions in the solar space, following on the heels of French nuclear giant Areva on Monday announcing it will snap up solar thermal startup Ausra. Solar panel maker and project developer SunPower (s SPWRA) announced it will buy European solar PV plant developer SunRay for $277 million. In addition, solar cell developer Calisolar also announced that it will acquire Toronto-based silicon purification startup 6N Silicon for an undisclosed amount.

Let’s look at the bigger one first. SunRay, which was owned by private equity firm Denham Capital and members of SunRay’s management team and has 70 employees, has a solar photovoltaic project that totals over 1,200 MW across Europe. In particular SunRay has a strong presence in Italy, with an office in Rome, and having recently completed a 24 MW power plant in Montalto, Italy. The project, Italy’s largest, will be expanded to 85 MW and was built in partnership with SunPower.

Howard Wenger, president of SunPower’s utilities and power plants business group, said in a statement that the SunRay acquisition “demonstrates our confidence in the Italian market and regulatory environment, and will accelerate the growth of our European and Middle Eastern power plant business.” SunPower also previously bought Italian solar company Solar Solutions, now rebranded as SunPower Italia.

San Jose, Calif.-based SunPower, which makes high-efficiency solar panels, has an installation business and develops utility scale projects. It increasingly seems to be focusing on its utility-scale PV development business. In 2008, utility PG&E (s PCG) said it would buy 250 MW of solar power from High Plains Ranch II, a subsidiary of SunPower for a project in San Luis Obispo County, Calif. and is supposed to be operational this year (see its other utility-scale solar projects here).

While the SunRay deal is all about scaling up, being the biggest, and selling large PV plants, Calisolar’s acquisition of 6N Silicon is down at the micro-level. 6N Silicon makes silicon that can be combined with scrap from the chip manufacturing industry to make crystalline silicon, which is used in solar panels. Unlike chip-grade silicon — which is measured in parts-per-trillion for purity — solar cells can use parts-per-million purity (hence the “six nines” implied in the company’s name.)

Calisolar makes solar cells and wafers with lower cost silicon (the kind that 6N makes) and says the 6N acquisition will help it “consolidate the supply chain,” and help it control and cut costs of its supplies. 6N is backed by Good Energies, Ventures West Management and Yaletown Venture Partners.

What do all these acquisitions at different points in the solar power industry say? Well, a year ago the solar industry was facing a very rough year ahead — in January 2009 of six solar stocks valued at more than $500 million, none outperformed the S&P 500 index, which fell 38 percent in 2008. And as expected, 2009 saw module overproduction, scarce credit, slack demand and plunging prices. While some predict that the solar PV industry has turned a corner, hard times often lead to consolidation, with the big companies getting aggressive and buying up the smaller ones.

As Fred Morse, U.S. senior adviser to Abengoa Solar, which makes solar thermal technology, put it to me yesterday, the name of the game for utility-scale solar is consolidation and financing. “You’ve got to be big and strong for this industry.”



PVinsights, , expect that silicon is still oversupply in 2010, due to the first tier traditional silicon makers capacity expansion and some Chinese solar grade silicon challenges. The oversupply doubts if Calisolar acquisition is a good deal.

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